AMC ENTERTAINMENT HOLDINGS INC

Previous wording

The following discussion relates to the consolidated audited financial statements of AMC included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements. Please see “Forward-Looking Statements” and “Risk Factors” in Part I on this Annual Report on Form 10-K for a discussion of the risks, uncertainties and assumptions relating to these statements. See Note 1**—**The Company and Significant Accounting Policies in Notes to the Consolidated Financial Statements under Part II, Item 8 thereof for information regarding the Company’s significant accounting policies.

Current wording

The following discussion relates to the consolidated audited financial statements of AMC included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements. Please see “Forward-Looking Statements” and “Risk Factors” in Part I on this Annual Report on Form 10-K for a discussion of the risks, uncertainties and assumptions relating to these statements. See Note 1**—**The Company and Significant Accounting Policies in Notes to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K for information regarding the Company’s significant accounting policies.

Previous wording

Our theatrical exhibition revenues are generated primarily from box office admissions and food and beverage sales. The balance of our revenues is generated from ancillary sources, including on-screen advertising, fees earned from our customer loyalty programs, rental of theatre auditoriums, income from gift card and exchange ticket sales, theatrical distribution, retail popcorn sales, and online ticketing fees. As of December 31, 2023, we owned, operated or had interests in 898 theatres and 10,059 screens.

Current wording

Our theatrical exhibition revenues are generated primarily from box office admissions and food and beverage sales. The balance of our revenues is generated from ancillary sources, including online ticketing fees, on-screen advertising, income from gift card and exchange ticket sales, rental of theatre auditoriums, retail popcorn and merchandise sales, fees earned from our customer loyalty programs, and theatrical distribution. As of December 31, 2024, we owned, operated or had interests in 871 theatres and 9,798 screens.

Previous wording

**Other.**Other general and administrative expense increased $34.3 million, or 16.5%, during the year ended December 31, 2023, compared to the year ended December 31, 2022 due primarily to stock-based compensation expense of $20.2 million related to a February 23, 2023 special award grant accounted for as a modification to the 2022 PSU awards which lowered the Adjusted EBITDA and free cash flow performance targets such that 200% vesting was achieved for both tranches and increased payroll, legal, professional and consulting and computer maintenance costs. The modification resulted in the immediate additional vesting of 238,959 Common Stock PSUs and 238,959 Preferred Equity Unit PSUs. The modification was treated as a Type 3 modification (improbable to probable) which required us to recognize additional stock compensation expense based on the modification date fair values of the Common Stock PSUs and AMC Preferred Equity Unit PSUs of $62.30 per unit and $22.20 per unit, respectively, during the year ended December 31, 2023. See Note 9—Stockholders’ Deficit in the Notes to the Consolidated Financial Statements under Part II Item 8 thereof for additional information about stock-based compensation expense.

Current wording

**Special Awards.**On February 22, 2024, the compensation committee of AMC’s Board of Directors approved modification of the performance goals applicable to all 2023 Tranche Year PSU awards. This was accounted for as a modification to the 2023 Tranche Year PSU awards which lowered the Adjusted EBITDA and free cash flow performance targets such that 200% vesting was achieved for both targets. This modification resulted in the immediate additional vesting of 478,055 2023 Tranche Year PSUs (21,829 cash settled units and 456,226 equity settled units). This was treated as a Type 3 modification (improbable-to-probable) which required the Company to recognize additional stock compensation expense based on the modification date fair values of the incremental PSUs. During the year ended December 31, 2024, the Company recognized $2.1 million of stock compensation expense related to these awards.

Previous wording

The below table summarizes various debt for equity exchange transactions that occurred during the year ended December 31, 2023. See Note 8—Corporate Borrowings and Finance Lease Liabilities, Note 9—Stockholders’ Deficit, and Note 16—Subsequent Events in Notes to the Consolidated Financial Statements under Part II, Item 8 thereof for more information.

Current wording

**Debt Repurchases and Exchanges.The below table summarizes the cash debt repurchase transactions and various debt for equity exchange transactions during the year ended December 31, 2023, including repurchases with a related party. See Note 8—**Corporate Borrowings and Finance Lease Liabilities in the Notes to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K for further informationon these transactions.

Previous wording

**Additional Share Issuances to Antara.**On December 22, 2022, we entered into the Forward Purchase Agreement with Antara pursuant to which we agreed to (i) sell to Antara 10,659,511 AMC Preferred Equity Units for an aggregate purchase price of $75.1 million and (ii) simultaneously purchase from Antara $100.0 million aggregate principal amount of the Company’s 10%/12% Cash/PIK Toggle Second Lien Notes due 2026 in exchange for 9,102,619 AMC Preferred Equity Units. On February 7, 2023, we issued 19,762,130 AMC Preferred Equity Units to Antara in exchange for $75.1 million in cash and $100.0 million aggregate principal amount of our 10%/12% Cash/PIK Toggle Second Lien Notes due 2026. We recorded $193.7 million to stockholders’ deficit as a result of the transaction. We paid $1.4 million of accrued interest in cash upon exchange of the notes.

Current wording

**Additional Share Issuances to Antara.**On December 22, 2022, we entered into a forward purchase agreement (the “Forward Purchase Agreement”) with Antara Capital LP (“Antara”) pursuant to which we agreed to (i) sell to Antara 10,659,511 AMC Preferred Equity Units for an aggregate purchase price of $75.1 million and (ii) simultaneously purchase from Antara $100.0 million aggregate principal amount of the Company’s 10%/12% Cash/PIK Toggle Second Lien Notes due 2026 in exchange for 9,102,619 AMC Preferred Equity Units. On February 7, 2023, we issued 19,762,130 AMC Preferred Equity Units to Antara in exchange for $75.1 million in cash and $100.0 million aggregate principal amount of our 10%/12% Cash/PIK Toggle Second Lien Notes due 2026. We recorded $193.7 million to stockholders’ deficit as a result of the transaction. We paid $1.4 million of accrued interest in cash upon exchange of the notes.

Previous wording

**NCM Bankruptcy.**On April 11, 2023, National CineMedia, LLC (“NCM”) filed a petition under Chapter 11 of the U.S. Bankruptcy Code in the Southern District of Texas. NCM is the in-theatre advertising provider for the majority of our theatres in the United States. Under the Chapter 11 Plan (the “Plan”), NCM has assumed its agreements with us. As part of the Plan, on August 7, 2023, NCM issued 16,581,829 common units that were owed to AMC as part of the annual common unit adjustment. But under the terms of the Plan and the restructuring of the equity of NCM thereunder, the NCM common units were immediately cancelled upon the efficacy of the Plan. We have filed appeals with the United States District Court for the Southern District of Texas, objecting to, among other things, certain terms of the Plan, including modification of the terms of the exhibitor services agreement with other parties that were not granted to us and appeal of the court’s order to approve cancellation of the NCM common unit issuance. We do not expect the NCM bankruptcy to have a material impact on the Company.

Current wording

**NCM Bankruptcy.**On April 11, 2023, National CineMedia, LLC (“NCM”) filed a petition under Chapter 11 of the U.S. Bankruptcy Code in the Southern District of Texas. NCM is the in-theatre advertising provider for the majority of our theatres in the United States. Under the Chapter 11 plan of reorganization, which became effective on August 7, 2023 (the “Plan”), NCM has assumed its agreements with us. As part of the Plan, on August 7, 2023, NCM issued 16,581,829 common units (“NCM Common Units”) that were owed to the Company as part of the annual common unit adjustment. However, under the terms of the Plan and the restructuring of the equity of NCM thereunder, the NCM Common Units were immediately cancelled upon the effective date of the Plan. On August 13, 2023, in

Previous wording

This litigation prevented us from immediately implementing the Charter Amendments. On April 2, 2023, the parties entered into a binding settlement term sheet to settle the litigation and allow implementation of the Charter Amendments. On August 11, 2023, the Delaware Chancery Court approved the settlement and on Monday, August 21, 2023, the Delaware Supreme Court confirmed the ruling of the Chancery Court. Pursuant to the settlement term sheet, record holders of Common Stock at the close of business on August 24, 2023, after giving effect to the Reverse Stock Split, but prior to the conversion of AMC Preferred Equity Units into Common Stock, received a payment of one share of Common Stock for every 7.5 shares of Common Stock owned by the Settlement Payment Recipients. On August 28, 2023, the Company made the Settlement Payment and issued 6,897,018 shares of Common Stock. See Note 11—Commitments and Contingencies in the Notes to the Condensed Consolidated Financial Statements under Item 8 of Part II of this Form 10-K for further information regarding the litigation and settlement. For capitalized terms used herein but not defined see Note 9—Stockholders’ Deficit in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof.

Current wording

This litigation prevented us from immediately implementing the Charter Amendments. On April 2, 2023, the parties entered into a binding settlement term sheet to settle the litigation and allow implementation of the Charter Amendments. On August 11, 2023, the Delaware Chancery Court approved the settlement and on Monday, August 21, 2023, the Delaware Supreme Court confirmed the ruling of the Chancery Court. Pursuant to the settlement term sheet, record holders of Common Stock at the close of business on August 24, 2023, after giving effect to the Reverse Stock Split, but prior to the conversion of AMC Preferred Equity Units into Common Stock, received a payment of one share of Common Stock for every 7.5 shares of Common Stock owned by the Settlement Payment Recipients. On August 28, 2023, the Company made the Settlement Payment and issued 6,897,018 shares of Common Stock. See Note 11—Commitments and Contingencies in the Notes to the Condensed Consolidated Financial Statements under Part II, Item 8 of this Form 10-K for further information regarding the litigation and settlement. For capitalized terms used herein but not defined see Note 9—Stockholders’ Deficit or Note 11—Commitments and Contingencies in the Notes to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K.

Previous wording

All of our significant accounting policies are discussed in Note 1**—**The Company and Significant Accounting Policies in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof.

Current wording

All of our significant accounting policies are discussed in Note 1**—**The Company and Significant Accounting Policies in the Notes to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K.

Previous wording

Assumptions and judgment. Our valuation methodology for assessing impairment requires management to make judgments and assumptions based on historical experience and projections of future cash flows. Our projections assume that operating revenues will continue to gradually improve to the point of approaching pre-COVID-19 levels. This assumption, together with other assumptions, create considerable amount of management judgment with respect to cash flow estimates and appropriate discount rates to be used in determining the fair value of long-lived assets.

Current wording

that operating revenues will gradually improve to the point they exceed pre-COVID-19 levels. This assumption, together with other assumptions, create considerable amount of management judgment with respect to cash flow estimates and appropriate discount rates to be used in determining the fair value of long-lived assets.

Previous wording

Our Current Long-lived Asset Impairment related Estimates and Changes in those Estimates. During the year ended December 31, 2023, we recorded non-cash impairment charges related to our long-lived assets of $49.2 million on 68 theatres in the U.S. markets with 738 screens which were related to property, net and operating lease right-of-use assets, net and $57.7 million on 57 theatres in the International markets with 488 screens which were related to property, net and operating lease right-of-use assets, net.

Current wording

During the year ended December 31, 2023, we recorded non-cash impairment charges related to our long-lived assets of $49.2 million on 68 theatres in the U.S. markets with 738 screens which were related to property, net and operating lease right-of-use assets, net and $57.7 million on 57 theatres in the International markets with 488 screens which were related to property, net and operating lease right-of-use assets, net.

Previous wording

At December 31, 2023, related cash flows were discounted at 9.0% for the Domestic Theatres and 11.0% for the International Theatres. At December 31, 2022, related cash flows were discounted at 10.0% for Domestic Theatres and 12.5% for International Theatres. At December 31, 2021, related cash flows were discounted at 10.0% for Domestic Theatres and 11.5% for International Theatres.

Current wording

At December 31, 2024, related cash flows were discounted at 9.0% for the Domestic Theatres and 10.5% for the International Theatres. At December 31, 2023, related cash flows were discounted at 9.0% for the Domestic Theatres and 11.0% for the International Theatres. At December 31, 2022, related cash flows were discounted at 10.0% for the Domestic Theatres and 12.5% for the International Theatres.

Previous wording

The following table sets forth our consolidated revenues, operating costs and expenses attributable to our theatrical exhibition operations and segment operating results. Reference is made to Note 13**—**Operating Segments in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof, for additional information therein:

Current wording

The following table sets forth our consolidated revenues, operating costs and expenses attributable to our theatrical exhibition operations and segment operating results. Reference is made to Note 13**—**Segment Reporting in the Notes to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K for additional information therein:

Previous wording

We present Adjusted EBITDA as a supplemental measure of our performance. We define Adjusted EBITDA as net earnings (loss) plus (i) income tax provision (benefit), (ii) interest expense and (iii) depreciation and amortization, as further adjusted to eliminate the impact of certain items that we do not consider indicative of our ongoing operating performance and to include attributable EBITDA from equity investments in theatre operations in International markets and any cash distributions of earnings from other equity method investees. These further adjustments are itemized below. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. The preceding definition of and adjustments made to GAAP measures to determine Adjusted EBITDA are broadly consistent with Adjusted EBITDA as defined in the Company’s debt indentures.

Current wording

We present Adjusted EBITDA as a supplemental measure of our performance. We define Adjusted EBITDA as net earnings (loss) plus (i) income tax provision (benefit), (ii) interest expense and (iii) depreciation and amortization, as further adjusted to eliminate the impact of certain items that we do not consider indicative of our ongoing operating performance and to include attributable EBITDA from equity investments in theatre operations in International markets. These further adjustments are itemized below. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. The preceding definition of and adjustments made to GAAP measures to determine Adjusted EBITDA are broadly consistent with Adjusted EBITDA as defined in the Company’s debt indentures. During the year ended December 31, 2024, we changed the definition of Adjusted EBITDA to no longer further adjust for “cash distributions from non-consolidated entities” and “other non-cash rent benefit.” All comparative period information for Adjusted EBITDA has been re-cast to conform with the current definition.

Previous wording

The following tables set forth our Adjusted EBITDA by reportable operating segment and our reconciliation of Adjusted EBITDA:

Current wording

The following tables set forth our Adjusted EBITDA by reportable segment and our reconciliation of Adjusted EBITDA:

Previous wording

Other expense (income) for the year ended December 31, 2022, primarily consisted of a loss on debt extinguishment of $92.8 million, partially offset by income related to the foreign currency transaction gains of $(12.3) million and contingent lease guarantees of $(0.2) million.

Current wording

Other expense (income) for the year ended December 31, 2023, primarily consisted of gains on debt extinguishment of $(142.8) million and foreign currency transaction gains of $(17.8) million, partially offset by non-cash litigation charge of $99.3 million.

Previous wording

During the year ended December 31, 2023, Adjusted EBITDA in the U.S. markets was $370.2 million compared to $59.6 million during the year ended December 31, 2022. The year-over-year improvement was primarily driven by an increase in attendance as a result of the popularity of new film releases, increases in food and beverage sales per patron, increases in average ticket price, increases in other revenues, and decreases in rent expense. These improvements were partially offset by increases in operating expenses and general and administrative expenses.

Current wording

During the year ended December 31, 2024, Adjusted EBITDA in the U.S. markets was $301.5 million compared to $391.1 million during the year ended December 31, 2023. The year-over-year decline was primarily driven by a decrease in attendance as a result of the availability and popularity of new film releases compared to the prior year and an increase in film exhibition cost percentage. These declines were partially offset by an increase in average ticket price, an increase in food and beverage sales per patron, and a decline in rent expense.

Previous wording

During the year ended December 31, 2023, Adjusted EBITDA in the International markets was $55.6 million compared to $(13.0) million during the year ended December 31, 2022. The year-over-year improvement was primarily driven by an increase in attendance as a result of the popularity of new film releases, increases in average ticket price, increases in food and beverage sales per patron. These improvements were partially offset by a decline in gift card and package ticket expirations and theatre rentals for meetings, decreases in government assistance, and increases in rent, operating expenses and general and administrative expenses. During the year ended December 31, 2023, Adjusted EBITDA in the U.S. markets and International markets was $425.8 million compared to $46.6 million during the year ended December 31, 2022, driven by the aforementioned factors impacting Adjusted EBITDA.

Current wording

During the year ended December 31, 2024, Adjusted EBITDA in the International markets was $42.4 million compared to $63.2 million during the year ended December 31, 2023. The year-over-year decline was primarily driven by a decrease in attendance as a result of the popularity of new film releases compared to the prior year, a decline in average ticket price, an increase in general and administrative expense and a decline in government assistance. These declines were partially offset by an increase in food and beverage sales per patron.

Previous wording

Total other theatre revenues increased $61.9 million, or 23.5%, during the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to higher ticket fees due to the increase in the number of tickets purchased online, increases in distribution revenues from TAYLOR SWIFT | THE ERAS TOUR and RENAISSANCE: A FILM BY BEYONCÉ, advertising, and retail sales, partially offset by lower income from gift cards and package tickets and lower income from theatre meetings.

Current wording

Total other theatre revenues decreased $0.5 million, or 0.1%, during the year ended December 31, 2024, compared to the year ended December 31, 2023 primarily due to decreases in distribution revenues fromTAYLOR SWIFT | THE ERAS TOURand* RENAISSANCE: A FILM BY BEYONCÉ* in the prior year and lower ticket fee revenues due to the decline in attendance, partially offset by increases in retail food and beverage sales, advertising revenues and higher income from gift cards and package tickets.

Previous wording

Operating expense increased by $163.1 million, or 10.7%, during the year ended December 31, 2023, compared to the year ended December 31, 2022. The increase in operating expense was primarily due to an increase in attendance and film distribution costs. As a percentage of revenues, operating expense was 35.1% for the year ended December 31, 2023, compared to 39.1% for the year ended December 31, 2022. Rent expense decreased 1.4%, or $12.7 million, during the year ended December 31, 2023, compared to the year ended December 31, 2022, due primarily to the early termination of one theatre lease for a benefit of $16.7 million, which included an early termination payment from the landlord for $13.0 million. See Note 3—Leases in the Notes to the Consolidated Financial Statements under Part II Item 8 thereof for further information on the impact of COVID-19 on leases and rent obligations of approximately $56.3 million that have been deferred to future years as of December 31, 2023.​

Current wording

Operating expense decreased by $12.1 million, or 0.7%, during the year ended December 31, 2024, compared to the year ended December 31, 2023. The decrease in operating expense was primarily due to the decrease in attendance. As a percentage of revenues, operating expense was 36.2% for the year ended December 31, 2024, compared to 35.1% for the year ended December 31, 2023. Rent expense increased $0.1 million, during the year ended December 31, 2024, compared to the year ended December 31, 2023. Rent expense included the early termination of one theatre lease for a benefit of $16.7 million in the prior year, which included an early termination payment from the landlord for $13.0 million.

Previous wording

**Impairment of long-lived assets.**During the year ended December 31, 2023, we recognized non-cash impairment losses of $49.2 million on 68 theatres in the U.S. markets with 738 screens (in Alabama, Colorado, District of Columbia, Florida, Georgia, Iowa, Illinois, Indiana, Kansas, Kentucky, Louisiana, Massachusetts, Maryland, Michigan, Minnesota, Missouri, North Carolina, New York, Pennsylvania, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin and West Virginia) which were related to property, net and operating lease right-of-use assets, net and $57.7 million on 57 theatres in the International markets with 488 screens (in Germany, Ireland, Italy, Portugal, Spain, Sweden, and the UK), which were related to property, net and operating lease right-of-use assets, net.

Current wording

During the year ended December 31, 2023, we recognized non-cash impairment losses of $49.2 million on 68 theatres in the U.S. markets with 738 screens (in Alabama, Colorado, District of Columbia, Florida, Georgia, Iowa, Illinois, Indiana, Kansas, Kentucky, Louisiana, Massachusetts, Maryland, Michigan, Minnesota, Missouri, North Carolina, New York, Pennsylvania, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin and West Virginia) which were related to property, net and operating lease right-of-use assets, net and $57.7 million on 57 theatres in the International markets with 488 screens (in Germany, Ireland, Italy, Portugal, Spain, Sweden, and the UK), which were related to property, net and operating lease right-of-use assets, net.

Previous wording

**Other (income) expense.Other **income of $(47.3) million during the year ended December 31, 2023 was primarily due to gain on extinguishment of debt of $140.5 million related to the redemption of $320.9 million aggregate principal amount of the Second Lien Notes due 2026, a gain on extinguishment of debt of $2.3 million related to the redemption of $4.1 million aggregate principal amount of our Senior Subordinated Notes due 2026, and a receipt of $14.0 million in settlement of the Lao Action, partially offset by, $110.2 million of expense related to the settlement of the Shareholder Litigation comprised of $10.9 million of estimated legal fees and contingent insurance recovery costs and $99.3 million of non-cash expense for the estimated fair value as of the date of the final Delaware Supreme Court order of settlement shares issued to holders of Common Stock on August 28, 2023.

Current wording

**Other income.**Other income of $156.2 million during the year ended December 31, 2024 was primarily due to $75.8 million of income related to the decrease in fair value of the Conversion Option (as defined herein) derivative liability, a gain on extinguishment of debt of $40.3 million related to the redemption of $837.7 million aggregate principal amount of the Second Lien Notes, $40.2 million of recoveries related to the Shareholder Litigation (as defined herein), the favorable settlement of a vendor dispute of $36.2 million, $12.4 million of equity in earnings of non-consolidated entities and $3.6 million of other settlement proceeds, partially offset by $42.3 million of third party costs related to the modification of the Existing Term Loans and $7.0 million of foreign currency transaction losses. Other income of $76.8 million during the year ended December 31, 2023 was primarily due to a gain on extinguishment of debt of $140.5 million related to the redemption of $320.9 million aggregate principal amount of the Second Lien Notes, a gain on extinguishment of debt of $2.3 million related to the redemption of $4.1 million aggregate principal amount of our Senior Subordinated Notes due 2026, a receipt of $14.0 million in settlement of the Lao Action (as defined herein), equity in earnings of non-consolidated entities of $7.7 million and $17.8 million in foreign currency transaction gains, partially offset by, $110.2 million of expense related to the settlement of the Shareholder Litigation comprised of $10.9 million of estimated legal fees and contingent insurance recovery costs and $99.3 million of non-cash expense for the estimated fair value as of the date of the final Delaware Supreme Court order of settlement shares issued to holders of Common Stock on August 28, 2023. See Note 1—The Company and Significant Accounting Policies in the Notes to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K for additional information about the components of other income.

Previous wording

**Interest expense.**Interest expense increased $32.5 million to $411.2 million for the year ended December 31, 2023 compared to $378.7 million during the year ended December 31, 2022 primarily due to:

Current wording

**Interest expense.**Interest expense increased $32.5 million to $443.7 million for the year ended December 31, 2024 compared to $411.2 million during the year ended December 31, 2023 primarily due to increased interest expense of $45.3 million on the New Term Loans compared to the Existing Term Loans, and interest expense of $18.2 million on the Exchangeable Notes issued on July 22, 2024, partially offset by declines in interest expense of $28.8 million on the Second Lien Notes due to redemptions of principal balances and declines in interest expense related to the revolving credit facility of $2.7 million. See Note 8—Corporate Borrowings and Finance Lease Liabilities in the Notes to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K for additional information about our indebtedness.

Previous wording

**Investment (income) expense.**Investment income was $(15.5) million for the year ended December 31, 2023, compared to investment expense of $14.9 million for the year ended December 31, 2022. Investment income in the current year includes a gain on sale of our 10.0% interest in Saudi Cinema Company, LLC of $15.5 million and interest income of $15.3 million, partially offset by $6.6 million of decline in estimated fair value of our investment in common shares of Hycroft and $6.0 million of decline in estimated fair value of our investment in warrants to purchase common shares of Hycroft, a $1.0 million impairment charge related to equity interest investments without a readily determinable fair value accounted for under the cost method, and $1.8 million of expense for NCM Common Units.

Current wording

**Investment income.**Investment income was $16.3 million for the year ended December 31, 2024, compared to investment income of $15.5 million for the year ended December 31, 2023. Investment income in the current year includes interest income of $19.2 million, partially offset by a $0.4 million decrease in estimated fair value of our investment in common shares of Hycroft and a $2.5 million decline in estimated fair value of our investment in warrants to purchase common shares of Hycroft. Investment income in the prior year includes a gain on sale of our 10.0% interest in Saudi Cinema Company LLC of $15.5 million and interest income of $15.3 million, partially offset by a $6.6 million decline in estimated fair value of our investment in common shares of Hycroft, $6.0 million decline in estimated fair value of our investment in warrants to purchase common shares of Hycroft, a $1.0 million impairment charge related to equity interest investments without a readily determinable fair value accounted for under the cost method and $1.8 million of expense for NCM Common Units.

Previous wording

Total other theatre revenues increased $56.0 million, or 14.1%, during the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to higher ticket fees due to the increase in the number of tickets purchased online, increases in distribution revenues from TAYLOR SWIFT | THE ERAS TOUR and RENAISSANCE: A FILM BY BEYONCÉ, and increases in advertising and retail sales, partially offset by lower income from gift cards and package tickets and lower income from theatre meetings.

Current wording

Total other theatre revenues increased $0.2 million, or 0.1%, during the year ended December 31, 2024, compared to the year ended December 31, 2023 primarily due to increases in retail food and beverage sales, advertising revenues and higher income from gift cards and package tickets, partially offset by decreases in distribution revenues from TAYLOR SWIFT | THE ERAS TOUR and RENAISSANCE: A FILM BY BEYONCÉ in the prior year and lower ticket fee revenues due to the decline in attendance.

Previous wording

Food and beverage costs increased $86.7 million, or 37.9%, during the year ended December 31, 2023, compared to the year ended December 31, 2022. The increase in food and beverage costs was primarily due to the increase in food and beverage revenues and increases in product costs and obsolescence. As a percentage of food and beverage revenues, food and beverage costs were 18.9% for the year ended December 31, 2023, compared to 17.4% for the year ended December 31, 2022.

Current wording

Food and beverage costs decreased $8.2 million, or 3.5%, during the year ended December 31, 2024, compared to the year ended December 31, 2023. The decrease in food and beverage costs was primarily due to lower food and beverage revenues. As a percentage of food and beverage revenues, food and beverage costs were 17.3% for the year ended December 31, 2024, compared to 17.4% for the year ended December 31, 2023.

Previous wording

Operating expense increased by $151.3 million, or 13.6%, during the year ended December 31, 2023, compared to the year ended December 31, 2022. The increase in operating expense was primarily due to an increase in attendance and film distribution costs. As a percentage of revenues, operating expense was 34.2% for the year ended December 31, 2023 and 37.5% for the year ended December 31, 2022. Rent expense decreased 2.3%, or $15.0 million, during the year ended December 31, 2023, compared to the year ended December 31, 2022, due primarily to the early termination of one theatre lease for a benefit of $16.7 million, which included an early termination payment from the landlord for $13.0 million. See Note 3—Leases in the Notes to the Consolidated Financial Statements under Part II Item 8 thereof for further information on the impact of COVID-19 on leases and rent obligations of approximately $52.1 million that have been deferred to future years as of December 31, 2023.

Current wording

Operating expense decreased by $9.7 million, or 0.8%, during the year ended December 31, 2024, compared to the year ended December 31, 2023. The decrease in operating expense was primarily due to the decrease in attendance. As a percentage of revenues, operating expense was 35.3% for the year ended December 31, 2024, and 34.2% for the year ended December 31, 2023. Rent expense decreased $1.6 million, during the year ended December 31, 2024, compared to the year ended December 31, 2023. Rent expense included the early termination of one theatre lease for a benefit of $16.7 million in the prior year, which included an early termination payment from the landlord for $13.0 million.

Previous wording

**Impairment of long-lived assets, definite and indefinite-lived intangible assets, and goodwill.**During the year ended December 31, 2023, we recognized non-cash impairment losses of $49.2 million on 68 theatres in the U.S. markets with 738 screens (in Alabama, Colorado, District of Columbia, Florida, Georgia, Iowa, Illinois, Indiana, Kansas, Kentucky, Louisiana, Massachusetts, Maryland, Michigan, Minnesota, Missouri, North Carolina, New York, Pennsylvania, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin and West Virginia) which were related to property, net and operating lease right-of-use assets, net.

Current wording

During the year ended December 31, 2023, we recognized non-cash impairment losses of $49.2 million on 68 theatres in the U.S. markets with 738 screens (in Alabama, Colorado, District of Columbia, Florida, Georgia, Iowa, Illinois, Indiana, Kansas, Kentucky, Louisiana, Massachusetts, Maryland, Michigan, Minnesota, Missouri, North Carolina, New York, Pennsylvania, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin and West Virginia) which were related to property, net and operating lease right-of-use assets, net.

Previous wording

**Other expense (income).**Other income of $(69.1) million during the year ended December 31, 2023 was primarily due to a gain on extinguishment of debt of $140.5 million related to the redemption of $320.9 million aggregate principal amount of the Second Lien Notes due 2026, a gain on extinguishment of debt of $2.3 million related to the redemption of $4.1 million aggregate principal amount of our Senior Subordinated Notes due 2026, a receipt of $14.0 million in settlement of the Lao Action and $17.8 million in foreign currency transaction gains, and partially offset by, $110.2 million of expense related to the settlement of the Shareholder Litigation (as defined in Note 9—Stockholders’ Deficit in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof) comprised of $10.9 million of estimated legal fees and contingent insurance recovery costs and $99.3 million of non-cash expense for the estimated fair value as of the date of the final Delaware Supreme Court order of settlement shares issued to holders of Common Stock on August 28, 2023.

Current wording

**Other income.Other **income of $124.4 million during the year ended December 31, 2024 was primarily due to $75.8 million of income related to the decrease in fair value of the Conversion Option derivative liability, a gain on extinguishment of debt of $40.3 million related to the redemption of $837.7 million aggregate principal amount of the Second Lien Notes, $40.2 million of recoveries related to the Shareholder Litigation, $10.7 million of equity in earnings of non-consolidated entities and $3.6 million of other settlement proceeds, partially offset by $42.3 million of third party costs related to the modification of the Existing Term Loans. Other income of $52.8 million during the year ended December 31, 2023 was primarily due to a gain on extinguishment of debt of $140.5 million related to the redemption of $320.9 million aggregate principal amount of the Second Lien Notes, a gain on extinguishment of debt of $2.3 million related to the redemption of $4.1 million aggregate principal amount of our Senior Subordinated Notes due 2026, a receipt of $14.0 million in settlement of the Lao Action, equity in earnings of non-consolidated entities of $5.5 million, partially offset by, $110.2 million of expense related to the settlement of the Shareholder Litigation comprised of $10.9 million of estimated legal fees and contingent insurance recovery costs and $99.3 million of non-cash expense for the estimated fair value as of the date of the final Delaware Supreme Court order of settlement shares issued to holders of Common Stock on August 28, 2023. See Note 1—The Company and Significant Accounting Policies in the Notes to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K for additional information about the components of other expense.

Previous wording

**Investment expense.**Investment expense was $1.6 million for the year ended December 31, 2023, compared to investment expense of $15.0 million for the year ended December 31, 2022. Investment expense in the current year includes $6.6 million of decline in estimated fair value of our investment in common shares of Hycroft, $6.0 million of decline in estimated fair value of our investment in warrants to purchase common shares of Hycroft, a $1.0 million impairment charge related equity interests without a readily determinable fair value accounted for under the cost method and $1.8 million of expense for NCM Common Units, partially offset by interest income of $13.7 million. Investment expense in the prior year includes $12.5 million of deterioration in estimated fair value of our investment in common shares of Hycroft Mining Holding Corporation and $(6.2) million of appreciation in estimated fair value of our investment in warrants to purchase common shares of Hycroft Mining Holding Corporation and a $13.5 million decline in estimated fair value of our investment in NCM common units offset by interest income of $(5.8) million.

Current wording

**Investment income.**Investment income was $14.0 million for the year ended December 31, 2024, compared to investment expense of $1.6 million for the year ended December 31, 2023. Investment income in the current year includes interest income of $16.9 million, partially offset by a $0.4 million decrease in estimated fair value of our investment in common shares of Hycroft and a $2.5 million decline in estimated fair value of our investment in warrants to purchase common shares of Hycroft. Investment expense in the prior year includes interest income of $13.7 million, partially offset by a $6.6 million decline in estimated fair value of our investment in common shares of Hycroft, $6.0 million decline in estimated fair value of our investment in warrants to purchase common shares of Hycroft, a $1.0 million impairment charge related equity interest investments without a readily determinable fair value accounted for under the cost method and $1.8 million of expense for NCM Common Units.

Previous wording

During the year ended December 31, 2022, we recognized non-cash impairment losses of $59.7 million on 53 theatres in the International markets with 456 screens (in Germany, Italy, Spain, Sweden, and UK), which were related to property, net, and operating lease right-of-use assets, net.

Current wording

**Impairment of long-lived assets.**During the year ended December 31, 2024, we recognized non-cash impairment losses of $20.4 million on 23 theatres in the International markets with 188 screens (in Germany, Italy, Spain, and the UK), which were related to property, net and operating lease right-of-use assets, net.

Previous wording

Impairment of long-lived assets, definite and indefinite-lived intangible assets, and goodwill. During the year ended December 31, 2023, we recognized non-cash impairment losses of $57.7 million on 57 theatres in the International markets with 488 screens (in Germany, Ireland, Italy, Portugal, Spain, Sweden, and the UK), which were related to property, net and operating lease right-of-use assets, net.

Current wording

During the year ended December 31, 2023, we recognized non-cash impairment losses of $57.7 million on 57 theatres in the International markets with 488 screens (in Germany, Ireland, Italy, Portugal, Spain, Sweden, and the UK), which were related to property, net, and operating lease right-of-use assets, net.

Previous wording

**Investment income.**Investment income was $17.1 million for the year ended December 31, 2023, compared to investment income of $0.1 million for the year ended December 31, 2022. Investment income in the current year includes a gain on sale of our 10.0% interest in Saudi Cinema Company, LLC of $15.5 million and interest income of $1.6 million.

Current wording

**Investment income.**Investment income was $2.3 million for the year ended December 31, 2024, compared to investment income of $17.1 million for the year ended December 31, 2023. Investment income in the current year includes $2.3 million of interest income. Investment income in the prior year includes a gain on sale of our 10.0% interest in Saudi Cinema Company LLC of $15.5 million and interest income of $1.6 million.

Previous wording

Our revenues are primarily collected in cash, principally through admissions and food and beverage sales. We have an operating “float” which partially financed our operations and which generally permitted us to maintain a smaller amount of working capital capacity. This float existed because admissions revenues are received in cash, while exhibition costs (primarily film rentals) are ordinarily paid to distributors from 20 to 45 days following receipt of admissions revenues. Film distributors generally release the films which they anticipate will be the most successful during the summer and year-end holiday seasons. Consequently, we typically generate higher revenues during such periods and experience higher working capital requirements following such periods.

Current wording

Our revenues are primarily collected in cash, principally through admissions and food and beverage sales. We have an operating “float” which partially financed our operations and which generally permits us to maintain a smaller amount of working capital capacity. This float existed because admissions revenues are received in cash, while exhibition costs (primarily film rentals) are ordinarily paid to distributors from 20 to 45 days following receipt of admissions revenues. Film distributors generally release the films which they anticipate will be the most successful during the summer and year-end holiday seasons. Consequently, we typically generate higher revenues during such periods and experience higher working capital requirements following such periods.

Previous wording

We had working capital deficits (excluding restricted cash) as of December 31, 2023 and December 31, 2022 of $(456.4) million and $(811.1) million, respectively. As of December 31, 2023 and December 31, 2022, working capital

Current wording

We had working capital deficits (excluding restricted cash) as of December 31, 2024 and December 31, 2023 of $(846.1) million and $(456.4) million, respectively. As of December 31, 2024 and December 31, 2023, working capital included operating lease liabilities of $524.9 million and $508.8 million, respectively, and deferred revenues of $432.4 million and $421.8 million, respectively.

Previous wording

As of December 31, 2023, we had cash and cash equivalents of approximately $884.3 million compared to $631.5 million as of December 31, 2022.

Current wording

As of December 31, 2024, we had cash and cash equivalents of approximately $632.3 million compared to $884.3 million as of December 31, 2023.

Previous wording

We have continued to lower our future interest expense through purchases of debt below par value and debt exchanges for equity and enhanced liquidity through equity issuances. See Note 8**—Corporate Borrowings and Finance Lease Liabilities, Note 9—**Stockholders’ Deficit, and Note 16—Subsequent Events in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof, for further information. We expect, at any time and from time to time, to continue to seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material and, to the extent equity is used, dilutive.

Current wording

We expect, from time to time, to continue to seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as we may determine, and will depend

Previous wording

Our cash burn rates are not sustainable long-term. In order to achieve sustainable net positive operating cash flows and long-term profitability, we believe that operating revenues will need to increase to levels in line with pre-COVID-19 operating revenues. North America box office grosses were down approximately 21% for the year ended December 31, 2023, compared to the year ended December 31, 2019. Until such time as we are able to achieve positive operating cash flow, it is difficult to estimate our liquidity requirements, future cash burn rates, future operating revenues, and attendance levels. Depending on our assumptions regarding the timing and ability to achieve levels of operating revenue, the estimates of amounts of required liquidity vary significantly.

Current wording

We believe our existing cash and cash equivalents, together with cash generated from operations, will be sufficient to fund our operations and satisfy our obligations currently and through the next twelve months. Our current cash burn rates are not sustainable long-term. In order to achieve sustainable net positive cash flows provided by operating activities and long-term profitability, we believe that revenues will need to increase to levels in line with pre-COVID-19 revenues. North America box office grosses were down approximately 23% for the year ended December 31, 2024, compared to the year ended December 31, 2019. Until such time as we are able to achieve sustainable net positive cash flows provided by operating activities, it is difficult to estimate our future cash burn rates and liquidity requirements. Depending on our assumptions regarding the timing and ability to achieve levels of revenue, the estimates of amounts of required liquidity vary significantly.

Previous wording

There can be no assurance that the operating revenues, attendance levels and other assumptions used to estimate our liquidity requirements and future cash burn rates will be correct, and our ability to be predictive is uncertain due to limited ability to predict studio film release dates, the overall production and theatrical release levels and success of individual titles. Additionally, the effects of labor stoppages, including but not limited to the Writers Guild of America strike and the Screen Actors Guild-American Federation of Television and Radio Artists strike that occurred during 2023, cannot be reasonably estimated and are expected to have a negative impact in 2024 on the future film slate for exhibition, the Company’s future liquidity and cash burn rates. Further, there can be no assurances that we will be successful in generating the additional liquidity necessary to meet our obligations beyond twelve months from the issuance of this Annual Report on terms acceptable to us or at all.

Current wording

There can be no assurance that the revenues, attendance levels and other assumptions used to estimate our liquidity requirements and future cash burn rates will be correct, and our ability to be predictive is uncertain due to limited ability to predict studio film release dates, the overall production and theatrical release levels and success of individual titles. Further, there can be no assurances that we will be successful in generating the additional liquidity necessary to meet our obligations beyond twelve months from the issuance of this Annual Report on terms acceptable to us or at all.

Previous wording

Net cash used in investing activities, as reflected in the consolidated statements of cash flows, were $180.1 million and $224.0 million during the years ended December 31, 2023 and December 31, 2022, respectively. Cash outflows from investing activities for capital expenditures during the years ended December 31, 2023 and December 31, 2022 were $225.6 million and $202.0 million, respectively.

Current wording

Net cash used in investing activities, as reflected in the consolidated statements of cash flows, were $242.9 million and $180.1 million during the years ended December 31, 2024 and December 31, 2023, respectively. Cash outflows from investing activities include capital expenditures of $245.5 million and $225.6 million for the years ended December 31, 2024 and December 31, 2023, respectively.

Previous wording

During the year ended December 31, 2023, cash flows used in investing activities also included proceeds from the sale of our investment in Saudi Cinema Company, LLC of $30.0 million and proceeds from the disposition of long-term assets of $16.5, offset by outflows for the acquisition of theatre assets of $4.0 million.

Current wording

During the year ended December 31, 2023, cash flows used in investing activities also included proceeds from the sale of our investment in Saudi Cinema Company LLC of $30.0 million and proceeds from the disposition of long-term assets of $16.5 million, partially offset by outflows for the acquisition of theatre assets of $4.0 million.